Thursday, September 29, 2005

A Long Cold Winter Ahead

The cost of keeping warm this winter is going up. As the News Journal warns, whether you heat your home with oil or gas, be prepared to pay more:

The price of natural gas, Delaware's main source of winter heat, could jump nearly 30 percent in the coming months, state regulators warned on Wednesday.Next week, Delmarva Power and Chesapeake Utilities Corp., the state's two natural gas companies, are expected to apply for rate increases to cover spikes in wholesale prices related to hurricanes Katrina and Rita. Even before the hurricanes disrupted production of natural gas, heating oil and gasoline this month, both companies expected to raise their prices.The state Public Service Commission said it expected increases of 20 percent to 30 percent based on national forecasts by the U.S. Energy Information Administration. Delmarva estimated its rates could go up by about 26 percent, while Chesapeake put its figure at 28 percent.

Since the beginning of the summer, the price of natural gas has doubled. But unlike crude oil or gasoline, whose recent gains have been widely felt by most Americans, the surge in natural gas prices, the most popular form of energy for home heating, has so far gone largely unnoticed.That is about to change as colder weather sets in. A hot summer, which pushed up natural gas consumption by electricity companies and depleted winter stocks, is expected to give way to a cold winter, which will push up residential consumption. Meanwhile, the Gulf Coast, the nation's largest energy hub, has suffered devastating punches from two severe hurricanes.